Understanding the value of your rental property is important before you buy it and once you start renting it out. Before you invest, make sure you understand what you’re likely to collect in rent. Get an idea of the local region. If you’re investing in the Myrtle Beach area or surrounding markets like Conway and Murrells Inlet, your property will likely appreciate in value pretty reliably. This contributes to rental property value as well.
Determining the value of your rental property can help you make informed decisions when it comes to setting your rental prices, making renovations, and, eventually, deciding whether or not to sell your property.
If you’re not sure exactly how to decide what your rental property is worth, we have some key factors that can help you determine its value.
Where is Your Investment Property Located?
Location will have a large impact on its value. In fact, it’s one of the most important factors when it comes to determining how much you should pay for a property, what you should charge in rent, and how much you should ask when it’s time to sell.
There are no magic formulas here: Properties that are located in desirable neighborhoods or close to amenities like schools, parks, and recreation tend to have a higher value than those that are more remote, located in neighborhoods with a lot of turnover, or lost in a sea of industrial space with little infrastructure or amenities.
Once you own a rental property, there’s very little you can do about its location. This is one factor that will stay the same every time you are setting a rental value or deciding whether to raise the rent at renewal time. It’s a fixed factor when it comes to determining value and price. This means you have to be acutely aware of how location will help or hinder you when you’re investing.
Property Condition and Myrtle Beach Rental Values
The condition of your rental property is another significant factor that can affect its value.
And, good news: This is one factor that you can change. You have total control over the condition of your rental property. The things you choose to do and not do will impact what you earn in rent and how much its value increases over time.
Well-maintained properties that are attractive, welcoming, and in good condition are likely to have a higher value than those that are run down or in need of major repairs. Deteriorated rental homes are not going to attract your best tenants. They’re not going to bring in the highest rents.
Two things are important in maintaining a property condition that delivers the value you expect:
- Regular maintenance
Maintenance will ensure you escape making those expensive emergency repairs. Put together a preventative maintenance plan that ensures you’re inspecting and servicing all of the major systems in your property regularly. You’ll notice this keeps your tenants happier and it also protects the condition and value of your investment.
- Renovations
When one tenant moves out and you’re preparing the property for another tenant to move in, you have an opportunity to make some improvements and upgrades. This will increase the value of your rental property. Make sure you take care of the obvious things; fresh paint, new window coverings, and cleaning. Look at the small details that deliver higher rental values as well. Consider hard surface flooring, which is more durable, preferable to tenants, and likely to raise your rental value. Install new mirrors, light fixtures, and hardware on drawers, cupboards, and faucets.
Good maintenance and regular improvements will increase your home’s value now and in the future.
Evaluate Your Competition
Whether you’re renting out a home in Surfside Beach, Socastee, or anywhere in the Myrtle Beach area, you need to measure your own property against comparable properties. This will help you establish and understand your rental value.
Look for properties that have similar features and amenities to your own and compare their rental prices. This can give you a good idea of what the market value is for properties in your area. Don’t forget to consider what you have that the other properties do not. This will elevate your value. If you’re lacking something that most rental properties in the neighborhood can offer, you’ll likely find your property valued a bit lower.
Having the right data is critical in this part of the investment process. If you’re not sure how to find the best comparable rental rates and home prices, talk to a local property manager. We are tracking these numbers all the time.
The Market and Your Property Value
The amount of rental income that your property generates is generally what determines its value. And, the income you earn largely depends on the local rental market.
The real estate market is constantly changing, and market trends can have a significant impact on the value of your rental property. Keep an eye on trends like population growth and job market stability in the Myrtle Beach area, as these can affect the demand for rental properties and ultimately the amount that tenants are willing to pay.
Currently, we’re enjoying a rental market that continues to be strong. Rents are high, demand is high, and you have a large pool of qualified tenants looking for homes to rent in Myrtle Beach, Conway, and the surrounding areas.
Pay attention to the sales and the rental market locally to get a better understanding of your property’s value. One thing that many new landlords get confused on when comparing comps is what the other properties are listed for, as opposed to what they are actually renting for. When an area is growing rapidly, the sales prices just like the rents are priced high. However, when homes get priced too high, they tend to sit on the market much longer than they should. This results in months of missed rent, and usually with the owners dropping the prices to what it should have been from the start.
Determining the value of your rental property is crucial for making informed decisions as a landlord and investor. Factors like location, property condition, comparable properties, rental income, and market trends can all help you determine the value of your rental property and make adjustments to increase its value over time. By staying informed, proactive, and working with a local property management partner, you can ensure that your rental property remains a profitable investment.
If you’d like to talk about your rental value, please contact us at J&P Unlimited. We manage investment properties in and around Myrtle Beach, Conway, Surfside Beach, Murrells Inlet, and Socastee.